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The rise and fall of LEGO: From near bankruptcy to the world's largest toy company

The toy company losing $1M per day and months from running out of cash — now the biggest toy maker on Earth.
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By The Numbers

$10B+
annual revenue today
$800M
debt at crisis
7,000
brick variations cut by 30%

What They Nailed Early

Built the toy of the century on one simple idea: high-quality interactive play with interlocking bricks. For decades, kids worldwide grew up building with LEGO, creating a beloved brand synonymous with creative construction.

What Changed

The 1990s brought seismic shifts—big box retailers slashed prices, video games stole attention, birth rates declined. Leadership panicked and diversified into clothing, electronics, theme parks—chasing every fad late. Internal complexity exploded to 7,000+ brick variations. Costs soared while the core brand got diluted. By 2003, LEGO had $800M in debt and was months from bankruptcy.

Where it Landed

World's biggest toy maker with $10B+ annual revenue and 25,000 employees globally. Family still owns majority stake. Adult fans now drive 30%+ of sales with $800 Millennium Falcon kits and architecture series.

The Principles

1. 
Complexity kills profitability. LEGO had 7,000 brick variations adding zero customer value—cutting 30% of parts and 50% of kits saved the business.
2. 
Constraints unlock creativity. Giving designers guard rails—target price points, specific brands, defined markets—paradoxically produced better, more profitable designs than total creative freedom.
3. 
Adjacent bets must enhance the core. The LEGO Movie was a two-hour brand celebration, not a pivot—every venture now drives people back to the brick.

Builder's Takeaway

If you're turning around a struggling brand, remember:
• 
Cut complexity ruthlessly—if it doesn't add customer value, it's just cost
• 
Return to your core mission before chasing new markets or products
• 
Let customers guide product development—build what they'll buy, not what you want
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